Aurum’s 30 year anniversary

Marking 30 years of investing in hedge funds

30 years ago today, Aurum issued its first month-end valuation for its new fund of hedge funds. September 1994 was a seminal moment for Aurum’s founders. But the foundations of Aurum were laid just over seven years earlier, in October 1987. On Black Monday – 19^th October 1987, equities suffered their sharpest drop since the Great Depression. In the same month, a little-known investment firm called Tudor Investment Corporation, delivered substantial returns to their investors.

Tudor was part of a very small cohort of managers that made up the nascent hedge fund industry. We knew then, as we know now, capital growth and preservation across market cycles was how we wanted our capital to be managed. The unconstrained approach adopted by hedge funds resonated strongly with us. October 1987 was a lightbulb moment and set in motion the events that later led to the development of Aurum – a business with an investment approach that has stood the test of time.

A new asset class. The essence of Aurum’s approach was to identify and invest in exceptional people and their businesses. We consider investment skill, when combined with a culture of strong risk control as well as outstanding operational infrastructure, to be a separate and unique asset class. This is where Aurum’s focus remains today. Aurum has more than 60 people that share the same mission and set of aspirations. We all strive to make Aurum the world’s best investor in hedge funds.

Money flows to where it is treated best. Aurum started with $16m under management. A handful of families trusted Aurum’s unique approach and invested their capital alongside our own. In the early years, Aurum’s investment approach was seen as somewhat unconventional, but we were committed to our mission of focusing on liquid, trading-oriented strategies, with the objective of delivering consistent, uncorrelated performance to our clients. Today, Aurum manages over $6 billion and has arrived at this point having navigated numerous market cycles over the last 30 years. Aurum’s style of investing continues to provide real and proven performance and diversification benefits.

The qualities that I believe Aurum encapsulates are focus, consistency and persistence. Aurum has never strayed from the essence of its unique approach when managing clients’ capital and has kept at it, year after year. Being predictable is not generally viewed as a complimentary trait – but for Aurum, predictability is paramount. We always want to ensure that clients know what to expect from Aurum namely, solid returns and outstanding service. We are committed to serving clients in ways that they want to be served by Aurum. The siren-songs of distraction and investment fads trying to blow us off course, are ever-present. We are acutely aware of our skills, which we sharpen, and our imperfections, which we strive to improve.

In the investment world, success is spelt: survival. And survival is spelt: adaptation. Two weeks ago, I had trouble navigating past a refrigerator-size box that was standing on a trolly in the lobby of our London offices. The large letters DELL gave me a clue about the obstacle in my way. A few weeks earlier I had approved the purchase of Aurum’s first Nvidia GPU-powered AI servers; the future had arrived. I could not help pausing and remembering Aurum’s first PCs. Email was not widely used in 1994, and it would be another six years before Google had any traction as a search engine. But the real workhorse at our inception in 1994 was our Canon fax machine. So much has changed and ensuring that Aurum remains positioned to embrace change to serve our clients is a guiding principle that informs Aurum’s decision-making process.

Data, data and more data. From inception, Aurum developed proprietary software and systems. We were compelled to innovate because the tools that we needed for our research and analysis were not available. This approach of in-sourcing technology and other business-critical systems and services have served both Aurum and clients well. Today we have 5 systems developers and 2 infrastructure engineers on the team – including a specialist AI engineer who leads Aurum’s data science efforts to leverage 30 years of data using cutting edge AI tools.

An evolving business model. Over the last few years, Aurum has transformed into an Embedded Impact® organisation. Embedded Impact® reflects a core element of Aurum’s business purpose – doing good in society and for the planet. Aurum’s Embedded Impact® approach is structured so that Aurum makes donations that proportionately increase as firm AUM grows. This ensures that as Aurum prospers as a business, it can have a meaningful, positive impact. To date, Aurum has donated almost $40m to environmental and humanitarian causes and the next milestone coming into focus is reaching $100m to help alleviate some of the world’s most pressing problems.

After 30 years, Aurum continues to move forward. And in this spirit, Aurum’s London offices will be moving next year. Our research efforts, which I am immensely proud to lead, have spent 30 productive years in South Kensington and have outgrown our office space. We look forward to welcoming you to our new office and will share details with you in 2025.

We are incredibly grateful to have arrived at this point in Aurum’s journey. So many factors have contributed – luck, judgement, people, process, discipline and a bit more luck. Our deep appreciation for our clients who have trusted Aurum with their capital cannot be overstated. The other side of this coin are the relationships we have forged with the managers that make up Aurum’s portfolios. Aurum’s underlying managers have been, and remain, the essential ingredient that has enabled Aurum to reach this milestone.

Aurum could never have accomplished what it has without the help, guidance, trust and commitment of every person and organisation that has travelled with Aurum over the last 30 years. As we embark on our fourth decade in business, our commitment to you will only grow, and it is with heartfelt gratitude that I thank you on behalf of all of us at Aurum.

Best wishes,

Kevin Gundle
CEO
Aurum Funds Limited